Los Angeles urban swath to test Obama's 'promise zone' plan

JONATHAN ALCORN, REUTERS

JONATHAN ALCORN, REUTERS

Alex Dobuzinskis

LOS ANGELES (Reuters) - Waiting for a bus in her heavily immigrant Los Angeles neighborhood, cleaning lady Yesenia Hernandez looked up at a new apartment block across the street that will boast such luxuries as a rooftop pool and dog park, with rents far beyond her reach.

"I want to move," said Hernandez, 38, standing in the shadow of another sleek residential building, the Wilshire Vermont Station. "The houses are being fixed but the rent is going higher. So people can't afford it."

This densely populated, multi-ethnic swath of Los Angeles is one of five areas across the country designated in January by President Barack Obama as a "promise zone", favored for investments to create jobs and alleviate poverty.

But gentrification already taking root there may prove a test for the plan, which taps existing federal funds for job training, affordable housing and public safety. Some urban planning experts warn that it may hike rents and displace the poor rather than create prosperous working class neighborhoods.

"You have to revitalize depressed parts of the city to help get rid of poverty but, on the other hand, getting rid of poverty has often meant getting rid of poor people, so it's important to make sure that doesn't happen," said Chris Tilly, director of the University of California, Los Angeles, institute for research on labor and employment.

In some ways, the Hernandez household represents the kind of low-income family that might benefit from Obama's initiative. An undocumented Mexican immigrant who came to the United States with her mother at the age of 10, she lives with her two children and now 61-year-old mother in a $1,000-a-month studio.

The plan could make her neighborhood safer and give her kids a better education. For now, as the pressure from high rents rises, she plans to relocate to a cheaper neighborhood that happens to be outside the zone's boundaries.

PROMISE ZONES

The initiative, which observers say builds on former President Bill Clinton's "empowerment zone" plan, was touted by Obama in his 2013 State of the Union address and represents one of his key efforts to help struggling Americans.

The other high-poverty areas chosen as "promise zones" are west Philadelphia, rural southeast Kentucky, the Choctaw Nation on tribal land in southeast Oklahoma and east San Antonio, which is also starting to be gentrified.

The zones were selected by the Obama administration from applications submitted by local governments and community groups across the country. The five areas chosen for the initiative are among 20 the White House plans to eventually name.

Federal officials say the choice was made on the merit of the plans proposed and that the city of Los Angeles was the lead applicant for its zone, which runs from tourist-heavy Hollywood to the mostly Hispanic Pico-Union area.

The designation does not come with earmarked federal dollars, but officials say the zones will have a leg up in applying for existing congressional appropriations for about 25 federal programs.

Like the other "promise zones" Los Angeles will have priority when it seeks federal funds to improve all aspects of the neighborhoods - from rental assistance to reintegration for ex-convicts, and from public school programs to support for local entrepreneurs.

For example, as one of the first efforts, a summer jobs program for young people will be expanded to give 2,000 youths work experience in fields from healthcare to banking, said Dixon Slingerland, executive director of the nonprofit Youth Policy Institute, which partnered with the city to win the designation.

It will also provide more after-school programs and tutoring to help local students succeed academically, he said.

GENTRIFICATION RISKS

In recent years, a number of upscale residential towers have been built in the Los Angeles zone, but local advocates for the designation say this kind of development has not lifted residents out of poverty, as local people often don't have the skills for the new jobs created.

More needs to be done, such as investing in job training and giving incentives to businesses to hire locally, they said.

"This is going to be a really interesting case study of how to fight poverty in a community with gentrification taking place, and really show it's possible," Slingerland said.

He said the Los Angeles zone is expected to be able to tap at least $100 million from federal funding over the initiative's 10-year term.

Millions of dollars are expected to go toward building affordable housing in the zone, mostly by funneling federal funds toward nonprofit groups constructing those units.

Los Angeles Mayor Eric Garcetti said the city would make every effort to ensure that the "promise zone" designation works for the poor.

"We're trying to build those bridges," he said. "In other areas where you have no development and high level poverty, it's really difficult to find the pathways out of poverty."

Los Angeles is far from alone in facing pressures from gentrification. In San Francisco, for instance, shuttle buses for well-paid Google employees who live in the eclectic Mission District have drawn protests from angry residents, who blame them for increasing rental costs and evictions.

In New York, gentrification is pushing into the Bronx, making that largely working class borough increasingly unaffordable.

But the Los Angeles zone could show ways in which poor residents could benefit from revitalization rather than be displaced, said Manuel Pastor, director of the University of Southern California's program for environmental and regional equity.